Dissenting Arbitrator's Reasoning

This document is the dissenting opinion of Arbitrator Professor Marcelo G. Kohen, appended to the Award in the ICSID arbitration between Rand Investments Ltd. et al. and the Republic of Serbia. The dissent articulates a fundamental disagreement with the majority's legal and factual conclusions, arguing that the Claimants failed to establish a protected investment under the Canada-Serbia BIT and the ICSID Convention.

Analysis of Legality and Treaty Interpretation

Professor Kohen challenges the majority's finding that an investment's compliance with domestic law is irrelevant unless the applicable BIT contains an explicit legality requirement. He posits that a good faith interpretation, considering the treaty's object and purpose, presumes a requirement of legality. Invoking the principle of ex injuria jus non oritur, he argues that international investment law should not protect investments made in disregard of the host state's domestic legislation. The dissent criticizes the majority's view that only violations of "fundamental rules of law" are relevant, asserting that this creates an undue advantage for foreign investors over domestic ones. Furthermore, the arbitrator contends that the origin of invested funds is highly relevant, particularly in the context of international efforts to combat money laundering, and that the majority's dismissal of this issue is legally and conceptually flawed.

Assessment of Evidence on Investor Identity and Control

A core element of the dissent is its rejection of the majority's factual finding that the Claimants proved Mr. Rand was the true beneficial owner and controller of the investment in BD Agro. Professor Kohen finds the evidence—comprising various private agreements, informal communications, and witness testimonies—to be indirect, inconclusive, and insufficient to meet the required standard of proof. He contrasts this with formal evidence, such as correspondence with the Serbian Privatization Agency, which he argues indicates Mr. Rand was merely a potential future investor rather than the actual owner. The dissent concludes that the Claimants' use of a Serbian national as a nominal owner to circumvent privatization laws, which provided advantages to nationals, constituted a concealment that violates the principle of transparency inherent in public procurement and should not be afforded BIT protection.

Conclusion of the Dissent

Ultimately, Professor Kohen concludes that the Claimants' investment structure was designed to bypass Serbian law and that they failed to prove ownership and control with credible evidence. He finds that private agreements governed by foreign law, such as the Cypriot-law "Sembi Agreement," cannot be held opposable to Serbia to create a protected interest under the BIT. For these reasons, he states that he cannot subscribe to the decision rendered in the Award by the majority of the Tribunal.